Saturday, June 17, 2017

politico | “Illinois is a real outlier in the most striking way. The sheer size
of the state’s unfunded pension liabilities … just looking at the
state’s finances, its habit of deferring payments from one year to the
next, has created a vicious circle,” said Ted Hampton, vice president
with Moody’s Investment Services. “Illinois has had a very large
negative balance both in absolute terms and relative to its budget for
many years.”

What does the crisis all boil down to? It began with an ego-laden
brawl between two powerful men: Rauner and Democratic House Speaker Mike
Madigan. Rauner was elected in 2014 as the first Republican governor in
Illinois in more than a decade, vowing to “shake up Springfield” in a
campaign that demonized Madigan — the longest serving House speaker in
state history — and targeted “corrupt union bosses.”

Upon taking office, Rauner, a multimillionaire businessman, laid out a
list of policy demands that initially included right to work elements
as a condition of signing a budget into law. Rauner wanted changes to
laws affecting workers' compensation, collective bargaining and state
property taxes, among others. Democrats considered the agenda an attack
on unions, which the governor had vilified, saying they had too much
power in Illinois politics. Rauner called the measures pro-business and
necessary to address decades of financial mismanagement.

But Madigan, who has served as speaker under governors from both
political parties, was loath to condition the passage of a budget on the
governor’s political agenda. Each side dug in, with unions rushing
behind Madigan and Republicans — tired of being shut out for years by
Madigan and thrilled to have a generous donor to their campaigns in the
governor’s office — lined up behind Rauner.

Today, Madigan’s Democratic-majority House and the Republican
governor remain entrenched in the war to end all political wars. The
exception is the Democratic-controlled Senate, which ultimately voted on
a tax increase before May 31 adjournment.

Both Rauner and Madigan counted on the other to cave. Neither has.
Meantime, the state is drowning in debt, deficit spending and multiple
bond-rating downgrades.

It’s increasingly possible that Rauner — who promised that he carried
negotiation credibility and the know-how to fix the state’s finances —
could complete his four-year term in office without ever having passed a
budget. At that point, economic forecasts indicate the state’s unpaid
bill pile would soar beyond $20 billion. The bill backlog was at about
$6 billion when Rauner first took office.

To put it into perspective, the Republican-dominated Kansas
Legislature just overrode a veto by its governor from the same party
that reversed the governor’s tax cuts and created $1.9 billion in
revenue. Lawmakers there panicked after the state found itself $900
million in the hole — a drop in the bucket compared to Illinois.